The Morning Ledger: CEOs Must Place Bets on Disruptive Technology

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Good morning. Boards and investors seek executives who can wage big bets on new technology and fend off upstarts, writes Christopher Mims. These corporate leaders aren’t being compared to their traditional rivals, but to quick-moving Silicon Valley startups that could make them irrelevant.

As evidenced by Ford Motor Co.'s decision to elevate Jim Hackett to the CEO position, an executive shake-up must bring in leaders who can build and protect disruptive business models. The new leaders must be part of a team that can maintain an existing business simultaneously. But CEO turnover isn’t the only solution for a company that seeks major changes. Companies also have to incubate potentially disruptive startups within their own corporate structures—protecting them as they develop, and absorbing their losses for as long as their competitors do.

CFO JOURNAL TODAY

Strong U.S. dollar could pressure borrowers.Multinationals and foreign companies that borrow in U.S. dollars could get squeezed by higher borrowing costs if the greenback strengthens, Vipal Monga writes based on a report from J.P. Morgan Chase & Co.’s investment bank.

THE DAY AHEAD

The U.S. Department of Commerce will release April’s durable-goods data and its second estimate of first-quarter GDP.

CORPORATE NEWS

An undated handout screenshot of Microsoft's new live-streaming service Mixer.

Microsoft

Ford’s new chief shuffles management team. Ford Motor Co. wooed back Sherif Marakby, a senior engineer who left the auto maker to develop autonomous vehicles at Uber Technologies Inc. His return is a symbolic victory for the automaker as it seeks changes under its new leadership. Ford also announced that product chief Raj Nair will take charge of North American operations and Europe’s operating chief Steven Armstrong will run the region. Marketing executive Peter Fleet will take over Asia-Pacific operations and purchase chief Hau Thai-Tang will add global product development to his role.

Cigna’s employees to give five shares of stock. Cigna Corp. intends to give every employee five shares of stock. The move is geared towards boosting employee commitment as it tries to move forward after its deal with Anthem Inc. fell through. The giveaway, which involves around 40,000 employees, will cost around $35 million.

Microsoft joins videogame stream. Microsoft Corp. launched its own videogame live-streaming service called Mixer on Thursday. It is late to live-streaming and faces competition from Amazon.com Inc.’s Twitch and Alphabet Inc.’s YouTube.

Saudi Aramco struggles to disengage from whims of royal family. Saudi Arabian Oil Co., or Saudi Aramco, is gearing up to go public. Potential investors say that in order for it to be considered on par with peers such as Exxon Mobil Corp. and Royal Dutch Shell PLC, it will need to present financial statements showing it is independent and that its profits aren’t subsidizing Saudi budget items.

Activist investor pressure mounts on BHP.Activist investor Elliott Management Corp. urged BHP Billiton Ltd. to conduct an independent review of its entire petroleum division. It also called for a broad restructuring of the company last month that includes a spinoff of its U.S. petroleum business.

Wells Fargo sweetens broker recruitment bonuses.Wells Fargo & Co.’s brokerage arm said it will raise its recruitment offers. The move came after The Wall Street Journal reported Morgan Stanley would significantly cut back on the pricey practice of poaching brokers.

Founding family of AmTrust invests further in insurer.The founding family of AmTrust Financial Services Inc. is investing an additional $300 million into the insurer after its shares plummeted because of investor concern. It hopes the fresh capital boosts stakeholder confidence.

China’s Lenovo reboots after lagging behind. China’s Lenovo Group seeks changes in its operations as it attempts to reclaim its title of global leader in personal computers. For the first time in four years, it fell from the top spot to No. 2 this year in the personal-computer market, putting it behind rival HP Inc.

REGULATION

Spotify Best New Artist Nominees celebration.

Kevin Mazur/Getty Images

GM sued by diesel truck owners. General Motors Co. was accused by owners of diesel-powered trucks of using illegal emissions software. The lawsuit targets more than 705,000 vehicles estimated to be on the road, with model years between 2011 and 2016.

‘Spotify rule’ could help NYSE woo unicorns.The New York Stock Exchange is looking to change its listing standards to allow direct listings as it vies for companies such as Spotify AB. This tactic lets companies trade their shares publicly, without raising money as in a traditional initial public offering. The Securities and Exchange Commission will rule on this change in the coming weeks.

Best Buy reports higher sales. Best Buy Co. said sales at domestic stores open a year or more rose 1.4%. Investors were expecting a decline. Domestic online sales rose 23% from a year ago, comprising of $1 billion of business in the quarter.

Goldman, Morgan Stanley diverge on Fed call. Economists at Goldman Sachs expect the Federal Reserve to raise rates again in September followed by a plan of how it intends to whittle down its balance sheet in December. Economists at Morgan Stanley predict the central bank will announce a balance sheet reduction plan in September and raise rates in December. The analysis came after the Fed released its minutes on Wednesday.

Trump officials offer differing view on tax plan.White House budget director Mick Mulvaney told a Senate committee that the administration’s tax plan doesn’t rely on any revenue coming from faster economic growth. At a different meeting, Treasury Secretary Steven Mnuchin said that the proposed tax plan will partly pay for itself with economic growth.

CEOs urge Mr. Trump to limit scope of Nafta changes. In a letter to the White House, top executives of 32 major companies urged President Donald Trump to move quickly on an update of the North American Free Trade Agreement without messing with its underlying structure.

Tivity Health Inc., a Franklin, Tenn., health and fitness solutions provider, named Adam Holland finance chief, effective June 15. Mr. Holland was most recently CFO of retailer Kirkland’s Inc. At Tivity, he will receive an annual base salary of $325,000, according to a filing. His incentive plans haven’t been determined.

THE WEEKEND READER

Every weekend we select a handful of in-depth articles we think are worth a bit of your time, either because they peel back the layers on a compelling business story, or somehow make us look at business in a different light.

Eastern Kentucky goes for solar energy, after being hit by coal’s decline.A solar farm is just one of the ventures aimed at reviving eastern Kentucky, which has been hit hard by job losses in the coal industry, Arian Campo-Flores writes for The Wall Street Journal. Other projects include a drone-testing facility, a high-tech greenhouse and software-coding training programs. Even if all the projects succeed, employment is unlikely to reach previous levels.

How State Street deals with the gender gap. State Street Global Advisors is still far from achieving gender parity, Annalyn Kurtz writes for Fortune. Critics admonished it for using feminism as a marketing ploy with the “Fearless Girl” statue. Ms. Kurtz sits down with the company’s top eight female executives to understand what it is doing to practice what it preaches.

Jared Kushner’s other real-estate empire. President Trump’s son-in-law Jared Kushner’s empire stands on modest, multifamily properties, Alec MacGillis writes for ProPublica. Kushner Cos., under the name JK2 Westminster LLC and other individual companies, has been pursuing tenants over allegedly unpaid rent or broken-lease issues even if the tenants aren’t always to blame.

The Morning Ledger from CFO Journal cues up the most important news in corporate finance every weekday morning. Send us tips, suggestions and complaints: kimberly.johnson@wsj.com.